Canada's Trudeau says won't back down in dispute with China, urges restraint in Hong Kong

OTTAWA (Reuters) - Canadian Prime Minister Justin Trudeau said on Wednesday he would not escalate a deepening trade and diplomatic dispute with China but added that his government had no intention of backing down as it defended its interests.

Speaking to an audience in Montreal just days after Beijing warned Ottawa not to meddle in Hong Kong's affairs, Trudeau also repeated his call for restraint and respect for human rights as protests sweep the former British colony.

China has detained two Canadian citizens and halted imports of canola seed and meat products from Canada since Vancouver police detained a senior Huawei Technologies Co Ltd executive on a U.S. arrest warrant in December.

"We must recognize that China is a growing power and increasingly assertive towards its place in the international order. But make no mistake - we will always defend Canadians and Canadian interests," Trudeau said.

"We have a long history of dealing directly and successfully with larger partners. We do not escalate, but we also don't back down," he said.

Speaking in Beijing on Thursday, Chinese Foreign Ministry spokesman Geng Shuang said the problems in the bilateral relationship were totally Canada's responsibility.

"We urge the Canadian side to reflect upon their mistakes, conscientiously treat China's solemn position and concerns, and release Meng Wanzhou," Geng added, referring to the detained Huawei executive.

Trudeau, whose Liberal Party faces a federal election in October, is under pressure from the official opposition Conservative Party to take a tougher line on China.

The Conservatives, tied in the polls with the Liberals, want Trudeau to withdraw from the China-led Asian Infrastructure Investment Bank, increase inspections on all Chinese imports and examine the possibility of retaliatory tariffs.

However, government officials say they do not want to do anything that could harm the two detainees.

Trudeau said Canada was also paying close attention to events in Hong Kong, which is home to 300,000 Canadian citizens and has been hit by weeks of sometimes violent pro-democracy protests that have drawn hundreds of thousands of people onto the streets.

"We have emphasized the need to exercise restraint and reject violence. Now is the time to engage in dialogue and respect fundamental freedoms, including the right to peaceful assembly," he said.

"The Canadian side's erroneous remarks confuse violent violations with peaceful assembly, ignoring the fact that the Hong Kong police force punishes violence according to law," it said.

"These kinds of wrong remarks are unable to distinguish right from wrong, invert black and white, and run counter to the current general appeal of Hong Kong society and all citizens to stop the violence and restore order," the ministry said.

China also warned Ottawa on Sunday to stop meddling in Hong Kong affairs a day after Canada issued a joint statement with the European Union in defense of the "fundamental right of assembly" for Hong Kong citizens.

(Reporting by David Ljunggren; Editing by Jonathan Oatis, Chris Reese and Tom Brown)